Fonterra Announces Timeline for Lactalis Deal and Capital Return

Fonterra, the New Zealand-based dairy cooperative, is progressing with its sale of major brands to French company Lactalis for $4.22 billion. This sale includes brands such as Mainland and Anchor and the Bega licenses held by Fonterra’s Australian operations. Fonterra plans to complete this transaction by the first quarter of 2026, contingent on receiving final regulatory approvals.

Fonterra shareholders will convene for a special online meeting on February 19 to approve a capital return of $2 per share, equating to approximately $3.2 billion. This capital return will be executed through a court-approved scheme of arrangement under the Companies Act 1993. The mechanics involve a buyback and cancellation of shares, ensuring shareholders maintain their compliance with Fonterra's minimum shareholding requirements and voting rights.

The capital return is designed to be tax-free, though shareholders are advised to seek independent tax advice. The transaction has already received approval from Australia’s Foreign Investment Review Board (FIRB), and Fonterra is continuing the separation activities necessary for the transaction's completion.

Fonterra Chairman Peter McBride stated that, if shareholders approve the capital return, there will be no further actions required from them. The record date for the capital return will be set within five business days prior to the payment being made to eligible shareholders and unitholders.

Fonterra anticipates that completing the shareholder vote in February will enable the capital return to occur promptly after the deal's finalization. The cooperative's focus remains on ensuring that the transaction complies with all regulatory requirements and is completed within the expected timeframe.